Increasing taxes is NOT to 'remove $ to prevent inflation' as $ can't be spent into the economy w/o prior tax liabilities to create sellers. Increasing $ tax liabilities does function to increase the economy's need to sell goods and services for $ which is a 'deflationary bias.'
Money story: Tax liabilities function to create sellers of goods and services seeking $ in exchange so gov can spend its otherwise worthless currency. So hiking tax liabilities increases the # of $ sought/increases nominal demand for $/increases the need to sell goods/services.
These are not prescriptions, but explanations of how it works, to assist MMT activists.
@ewarren It doesn't reduce aggregate demand so it doesn't add any fiscal space... :(
@ewarren So it doesn't at all address the real issue- excess consumption by 'the rich' (or anyone else), and, in fact is a useful distraction for 'the rich' that works to delay resolution of this real issue. :(
@ewarren We can gain $trillions per year of fiscal space by eliminating most of the parasitic financial sector by deleting the supportive institutional structure that created it. Not mention how Medicare for all likewise cuts $1 trillion in real costs.
Responses to 'how are you going to pay for it?': 1. The Tsy instructs the Fed to credit the appropriate account. 2. The $ to buy bonds or pay taxes comes only from the gov and its agents, so gov spends first, and then taxes are paid or bonds paid for.
3. So gov borrowing supports rates, it doesn't fund expenditures. 4. Likewise interest is paid by instructing the Fed to credit the appropriate accounts, and likewise those $ are paid first, and then taxes are paid or bonds are paid for.
The public debt is the $ paid by gov that haven't yet been used to pay taxes and remain outstanding as cash, balances in reserve accounts at the Fed, or balances in securities accounts (tsy secs) at the Fed until used to pay taxes.